There is breaking news that the NBA players and owners have reached a deal to save the extended pre-season. When that many teams make the playoffs, that’s’ all the “regular season” is – a preseason at regular season prices. The owners had locked the players out because they wanted what all members of the executive class want when they come to own professional sports teams. An end to the free market in labor, to be replaced with a “salary cap” system intended to keep labor income down, such as the one now in place (with “harder” and “softer” caps different cases) in every major sport.

The attitude is very different, of course, when members of the executive class are setting each other’s pay. They claim that the huge increase in their share of total wealth in the 1990s, justified then by the stock market bubble at the time but never reduced once the bubble deflated, is the result of a sacrosanct “free market.” In reality, however, the market in executive pay is just as rigged, but in the other direction. Through the agency of the executive pay consultants they all hire, Boards of Directors inevitably conclude that if the previous deal for an executive was for X, the next executive deserves X plus 10 percent. And then when member of the Board of one company get their pay set in another company, they expect X plus 10 percent plus 10 percent. That is nothing like a free market, and very much like the way public employee pay and pensions are set – more and more for those in on the deal, leaving less and less for those forced to pay, who have no say. And there is no salary cap in executive pay, and no thought of creating one.

There is a Moby song which seems to be about a woman who is drowning in a sea of love and she is getting tired of swimming and just wants to rest and be released from her endeavor to persevere.  That is how many Armenians feel about the Armenian Genocide.  We are growing tired of fighting for Turkish recognition of the event yet keep pushing on determined hoping to be released from this prison of memories.

At dinner tonight, Dybbuk said he was thankful there was no Hebrew School today.  

This Thanksgiving I watched two elderly women on TV.  One was a Holocaust survivor and the other was at that time a child whose family hid the survivor from the Nazis at their own peril.  The two women, one Catholic the other Jewish, were reunited for the first time at a tearful reunion celebrating the joy of human compassion.  The scene made me cry with the childhood friends.

I try to limit links to any one blogger in any Gateway column, but Jonathan Chait not only makes the same points I’ve been making for months—a sure way to get a link from me—but he does it better and then comes up with things I’ve never thought of.    

There are two ways to approach Confucianism.  One is religious the other philosophical.  For our purposes we will take the later approach.  Many people are dismayed with the way American government is now working at the national, state and local level.  Our system of government is marked by greed, a thirst for power, inaction and corruption.

According to the Wall Street Journal, Governor Cuomo is negotiating with public employee unions to use pension funds to pay for infrastructure. So how much interest is Governor Cuomo going to pay on those loans from the pension funds? They assume an 8.0% rate of return – starting from the peak of the stock market bubble in 2000. If they didn't, New York’s state and local governments would have to admit that, for example, NYC pension contributions would have to rise far higher than the 40.0% of payroll they are now. Taxes would have to rise, and or public services would have to be further gutted, to make up the difference. Above and beyond the devastation already being visited on less politically influential New Yorkers.

Either Cuomo is looking to raid the pension funds, perhaps offering even earlier retirement in exchange, with the cost deferred. Or the pension funds are looking to raid whoever will be paying back the debt, by having the state pay a higher interest rate than it could get by just issuing bonds. Or perhaps Cuomo hopes that by locking public employee pension funds into a lower rate of return, and then jacking up local government contributions to the funds to make up for it, he can force local governments to fund the state budget. Regardless, when politicians and pension funds get together, there is no doubt who is being made worse off. Future generations of less well off people who don’t even get pensions themselves. Because both pension funds and municipal bonds are tax free, it makes no sense of pension funds to invest in municipal bonds. This is just another way for Generation Greed to defer the disaster it has created for the future, now the present, into the later future. Hey Governor, if you want to borrow, put a referendum to the voters, as the state constitution requires. If the pension funds want to invest in the bond issue at the market clearing interest rates, they would be free to do so.